This May Be Tungsten’s Year And Geodex Has Plenty Of Tonnage And Near Term Production To Take Advantage
By Alastair Ford
minesite.com
There’s an interesting table in the Geodex Minerals presentation that two members of the company’s management team, exploration director Jack Marr, and business development director Chris Anderson, were showing around town last week. They were here as co-sponsors of the Global Capital Forums tungsten-molybdenum conference held in London on 2nd April. According to the table in question, Geodex has more tonnes of tungsten ore in the ground than most of the rest of the world’s other quoted tungsten companies put together.
With more than 90 million tonnes of ore grading 0.186% WO3 equivalent, and giving a total of 202 million pounds of tungsten in the indicated category, Geodex is a serious player in this business. The other companies on the list are Tiberon, Vital Metals, Oriental Minerals, Galway Resources, Playfair, North American Tungsten, Largo Resources, Primary Metals and King Island Scheelite. Of the total tungsten tonnage that these companies have on record, some of which is only in the inferred category, Geodex’s 90 million tonnes accounts for around 20 per cent. Indeed strip out the 242 million tonnes held by Largo Resources on its Northern Dancer property in the Yukon, by far the largest reported resource held by any of the aforementioned companies, and Geodex’s proportion rises to 40 per cent.
What’s more, Geodex’s assets are all in New Brunswick, which is fairly easy operating country, as opposed to the Yukon, which, along with Largo, is also home to North American Tungsten, and where the environment is, to say the least, challenging. Toronto-listed North American Tungsten bills itself as the western world’s largest producer of tungsten concentrate, but as we speak can only boast a reserve of one million tonnes on its Cantung property, which may well be mined out soon, and a resource of just over 44 million tonnes in the indicated and inferred categories on its less advanced Mactung property. Still, at least North American Tungsten is in production, having produced just over 65,000 metric tonne units (mtus) of tungsten concentrate in the first quarter of its current financial year.
The real key to the tungsten story, however, doesn’t lie in the Yukon or in New Brunswick. A clue lies in North American Tungsten’s claim to leadership in the western world. That it may be, but tungsten is a story that - even more than other metals – leads back to China. “This might be tungsten’s year”, says Geodex’s Jack Marr. He’s not the only one thinking that. Many are assuming that so it went for molybdenum, so it will go for tungsten. It’s something of a sentiment-driven argument, rendered only slightly more relevant by the fact that the two metals often occur together in the same scheelite ore. The price of tungsten strengthened significantly in 2005, but it hasn’t really been on an upward trend since then, hovering consistently at around the US$250 per mtu mark, according to data from Metal Bulletin. But in tungsten China plays a pivotal role, and not just by setting the demand levels, but also because of its serious influence on supply. In 2005, China produced 80 per cent of the world’s tungsten. Chinese flooding of the market had previously led to more than a decade of price weakness. But, the Chinese reserves are now running down, and China recently became a net importer of tungsten for virtually the first time since its tungsten reserves were discovered nearly a hundred years ago.
That’s why companies like Geodex are now getting a fair hearing in major financial hubs like London, when a decade ago, pitching their key Sisson Brook property, where the grades are admittedly on the low side, they’d have been laughed out of town. Geodex’s UK investment base is fairly small at the moment, and centred, of all places, around Blackpool, but you can bet that the UK’s mining money men will move into this market fairly quickly as supply tightens. To date, Ormonde have been a voice in the tungsten wilderness in London. But no more. There was some scepticism in advance about how the recent tungsten conference would go, and some attendees did indeed give mixed reviews. But Chris Anderson and Jack Marr were happy, and they’re flying economy from Vancouver, so that’s saying something. Mining at Sisson Brook is due to get underway in 2009, at a rate of 20,000 tonnes per day. No doubt they’ll be even happier then. |
